Definition of standard costing

Definition of standard costing:

(1) CIMA (London) defines, “standard costing is a control technique which compares standard costs and revenues with actual results to obtain variances which are used to stimulate improved performance”.

(2) According to Prof. Eric L. Kohler, “Standard is a desires attainable objective, a performance, a goal, a model”. Standard may be used to a pre-determined rate or a pre-determined cost or a pre-determined amount.

(3) According to ICMA technology defines “standard costing is the preparation and use of standard costs, their comparison with actual costs and analysis of variances to their causes and points of incidence”.